Market Overview
Hiring activity in mainland China has rebounded strongly since the fourth quarter of 2009 and we have seen increased recruitment volumes across all professional groups. The demand for professional workers is intensifying and employers are facing the challenges of a tight labour market in which there is increasing competition for talent.
Our annual employment survey, which this year includes the responses from more than 300 employers across mainland China, reveals that 63% of companies have increased employee numbers over the last six months. Only 6% have decreased staff numbers in this timeframe, which is in stark contrast to the employment market that existed during the global financial crisis.
Jobs growth has been particularly strong in financial services. This sector was heavily impacted during the financial crisis and employers have been expanding strongly across front, middle and back office functions through the first half of 2010. With capacity increasing to support rising trading volumes, the resulting upturn in business investment is flowing through to other commercial sectors in mainland China. This is leading to improved hiring activity in sales and other front line revenue generating areas, as well as in-house functions like marketing and IT that are necessary to support business expansion.
From a global perspective, mainland China remains an area of preferred investment for multinationals that are exposed to the ongoing weakness of the US and European economies. Most multinationals already have a presence in mainland China, so the focus is on further expansion to take advantage of emerging opportunities. This positivity and focus on growth is illustrated in our survey results, with 65% of employers planning to increase their staff numbers over the next six months.
The challenge for employers in 2011 will be in retaining and attracting the talent needed to achieve their business objectives. During the first half of 2010, there was a reasonable balance between the number of candidates looking for jobs and the volume of positions advertised. In the second half of the year, the supply of high quality professionals has tightened significantly while the demand from employers has continued to escalate. Top performing professionals are receiving multiple job offers and employers that delay their hiring decisions are losing candidates to competitors.
Given the positive business and employment outlook, some 52% of the employers surveyed already recognise that a professional skills shortage will be an issue for their business in 2011. Talent management is becoming a critical business challenge because more jobs are available and employees are less cautious about moving.
Salary reviews will play a central role in attraction and retention strategies in 2011. Of the employers surveyed, 75% expect to see an increase in employee salaries over the next six months. We anticipate that the salary increases for existing staff will be in the 5-10% range, going as high as 15-20% for companies recruiting external candidates into their business.
